Go to Hell, Wells Fargo!

Posted on 12. Aug, 2010 by JohnCByrdIII in Business

The corporate demon we know as Wells Fargo has taken a significant blow this tuesday as a federal judge in California ordered Wells Fargo to change what he called “unfair and deceptive business practices” that led customers into paying multiple overdraft fees.

As we’ve all been complaining for years, Wells Fargo employs a policy of processing checks, debit card transactions and bill payments from the highest dollar amount to the lowest, rather than in the order the transactions took place.  U.S. District Judge William Alsup referred to this practice as “gouging and profiteering.”  He went on to say, “Internal bank memos and e-mails leave no doubt that, overdraft revenue being a big profit center, the bank’s dominant, indeed sole, motive was to maximize the number of overdrafts.”

The judge dismissed Wells Fargo’s arguments that customers wanted and benefited from the policies, and detailed evidence he said showed efforts to obscure the practices in statements and other materials. Wells Fargo’s online banking system, for example, would display pending purchases in chronological order, “leading customers to believe that the processing would take place in that order.”

Wells Fargo has been ordered to stop the gouging by November 30th.  They are also ordered to reverse all overdraft fees charged to customers from November 15, 2004 to June 30, 2008.  This is estimated to cost Wells Fargo up to $203 million!

Expect Wells Fargo to appeal this ruling, but when the decision upholds, expect a Christmas gift in your checking accounts.  Since all major banks immediately mimicked Wells Fargo’s practices, class action suits will be filed industry wide in the near future.

Source: Yahoo Finance

Tags: Banking, Overdraft Charges, Wells Fargo, William Alsup